Ofgem has launched an investigation into Economy Energy Trading Limited’s marketing and telesales practices.
It follows concerns about the supplier’s approach to recruiting new customers.
Citizens Advice raised concerns in July relating to “a high level of complaints” against Economy Energy.
The company supplies gas and electricity to domestic customers mostly on prepayment meters.
The regulator will examine whether the company breached licence conditions which require suppliers to communicate transparently and accurately to customers when undertaking marketing and sales activities.
Ofgem said the opening of the investigation does not imply it has made any findings about non-compliance.
A spokesperson for Economy Energy said: “We are co-operating fully with Ofgem and customer satisfaction remains our utmost priority at all times.”